Treasury benefits regulator to be nominated as next PBGC chief

W. Thomas Reeder.

President Barack Obama said he intends to nominate W. Thomas Reeder, health care counsel at the Internal Revenue Service, to be director of the Pension Benefit Guaranty Corp.

If confirmed by the Senate, Mr. Reeder would succeed Joshua Gotbaum, who left the PBGC in September to take a position at The Brookings Institution in Washington.

Prior to joining the IRS in 2013, Mr. Reeder was senior benefits counsel on the Senate Finance Committee from 2009 to 2013. From 2000 to 2013, Mr. Reeder also held several positions at the U.S. Treasury Department, including benefits tax counsel and deputy benefits tax counsel.

Before joining the Treasury Department, Mr. Reeder was a partner at the Paul Hastings, Janofsky & Walker L.L.P. law firm and an associate at Akin, Gump, Strauss, Hauer & Feld L.L.P.

Mr. Reeder's nomination, announced Wednesday, comes at a time when the PBGC, which guarantees pension plan participants through two insurance programs, faces major financial issues.

The deficit in the agency's single-employer insurance program topped $19 billion last year. At the same time, mandatory premiums paid by employers with defined benefit plans, which are a PBGC revenue source to fund benefits promised to participants in failed plans the agency has taken over, could erode as more employers reduce the size of their plans by shifting the liabilities to insurers through the purchase of group annuities or offer participants the option to convert their pension benefits to a cash lump sum.

The deficit in the agency's multiemployer insurance program is even higher — rising more than fivefold in fiscal 2014 to a record $42.4 billion. Lawmakers, alarmed by that deficit, passed legislation in the closing weeks of the last congressional session that will allow financially troubled multiemployer plans to cut benefits to prevent their collapse.